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UK government has signed a cooperation agreement with Hitachi and Horizon Nuclear Power

The UK government has signed a cooperation agreement with Hitachi and Horizon Nuclear Power “to promote external financing” for the Wylfa Newydd nuclear power plant.

The agreement was signed today by chief secretary to the Treasury Danny Alexander at the launch of the government’s latest National Infrastructure Plan. The accord was signed “with the aim of being able to agree an in-principle guarantee by the end of 2016 to support the financing of a new nuclear power plant at Wylfa, subject to final due diligence and ministerial approval,” HM Treasury said.

Hitachi-GE – 80% owned by Hitachi and 20% by GE – is the technology provider and delivery team leader for Horizon’s new-build plans at Wylfa. It has already been contracted to perform front-end engineering and design work for the proposed Wylfa plant.

The cooperation agreement establishes arrangements designed to enable access to the UK Guarantee Scheme (UKGS), introduced in October 2012 to support infrastructure projects seeking finance and investment. Hitachi and Horizon said, “External finance, potentially from both equity and debt sources, is expected to be required to fund the construction of the project, and the UKGS is considered to be a key component of any future financing structure.”

Alexander commented, “Putting the financing plan together will be a commitment from both sides. But the agreement today shows that – just as we did with Hinkley Point – this government is prepared to give certainty to investors, to help them make the financial decisions that are critical for our nation’s infrastructure.”

Horizon, which was acquired by Hitachi of Japan last November, plans to build two Advanced Boiling Water Reactor (ABWRs) at its Wylfa site on the island of Anglesey in north Wales. The units would be the first commercial boiling water reactors in the country.

Deputy chairman of Hitachi Europe Masaharu Hanyu said, “Our acquisition of Horizon represents a 100-year commitment to the UK. This cooperation agreement is a welcome demonstration of the UK government’s equal commitment to making a new generation of nuclear power stations a reality.”

Horizon expects to have all the required licences and permissions in place for the Wylfa Newydd project by 2018. The company is planning on the basis of site works beginning around 2015, leading to the start of major on-site work in 2018 and first nuclear construction around 2019. Horizon said that the start of commercial operation of the plant depends on the timing of a final investment decision and detailed construction program, but is expected in the first half of the 2020s.